Youth in Asia Go to Wealth Camp

By

Alison Tudor

Updated Sept. 10, 2010 12:01 a.m. ET

When 100 young adults gathered in Hong Kong for summer school, they didn't brush up on French or calculus. Instead, they learned about the dangers of marrying without a prenuptial agreement, how to buy art and how to safeguard an inheritance.

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These are no ordinary students. Together, these 18- to 34-year-olds—scions of some of Asia's wealthiest families—are heirs to combined fortunes of about $50 billion. Yet their concerns as they seek to safeguard their wealth while establishing their own identities will be familiar to their peers around the world.

The connections were easy to establish early on in the course, says Joe Liao, who grew up in Hong Kong, where his father founded one of Asia's first liquid-crystal-display makers, Varitronix International Ltd.

"At the dinner table we started pulling out our cellphones and checking on Facebook," said Mr. Liao, a 6-foot-tall, laid-back 25-year-old doing post-graduate studies in architecture at Harvard University. "Everyone on the table was connected."

Their classrooms were the maple-paneled library and ballrooms of the Island Shangri-La hotel, where Citi Private Bank was offering a free five-day crash course called "The Next Generation of Wealth." Attendees' families had to have at least $10 million at the bank and pay their own travel costs.

The Citigroup unit hosts similar events in London and New York, but this year's camp in Asia, which took place in July, was the best-attended since the program started in 2003, according to the global head of marketing at Citi Private Bank, who is appropriately named Money K.

The attendance roster reflects a change in global fortunes: As of the end of last year, the number of high-net-worth individuals in Asia matched those in Europe for the first time, according to a recent report by CapGemini and Merrill Lynch, and looks set to continue expanding amid an unprecedented creation of new wealth across the region. Although people with $30 million or more account for just 0.6% of Asia's population, less than any other region, they held 22.5% of the area's private wealth, the report said.

At the same time, more-established Asian dynasties are witnessing a generational shift as the patriarchs who built them retire. Citigroup, like other banks that hold similar courses on what you need to know about being rich, is keen to advise the decision-makers of the future.

As the students assembled for the first day of classes, some hugged one another as they recognized cousins and friends. Most were casually dressed—one young woman wore a lumberjack shirt, jeans and sneakers—but snatches of conversation suggested a shared lifestyle of affluence. Several of the men talked of collecting cars. One woman mentioned she already had crashed three.

The camp activities started at 8 a.m. and finished as late as 10:30 p.m., with the itinerary swinging between lectures on asset management and estate planning, chats with bankers about family problems—such as living up to their parents' expectations—and sales pitches for luxury products. Speakers were either Citi bankers or experts in their field.

"Are you all tired of financial talk?" asked Shirley Yablonsky, an art-gallery director in Hong Kong, after a session on taking the family business public. "Yes!" many shouted, as she explained some of the reasons they might choose to invest in art. It can help you define who you are, she explained. "Maybe your feng shui master said you need something red, so you go buy a painting," she said. "I can help you spend a lot of money."

Inheritance was a recurring concern, as it is for the young and wealthy everywhere. A camp instructor exhorted students to plan ahead, and they discussed Nina Wang, whose multibillion-dollar fortune was the subject of a protracted battle with her father-in-law after the death of her husband, Hong Kong real-estate magnate Teddy Wang. Later, her feng shui adviser claimed to be the rightful heir, though a Hong Kong court ruled against him earlier this year.

Making romantic connections is a common extracurricular activity at the camps. Ben, a teenager from Thailand, introduced himself to the group as "5 feet 7 inches, brown eyes, looking for someone."

Occasionally, things get serious and dynasties merge. Two young people who met on the course in 2006 are getting married this year, Citi said.

Accordingly, students were advised to secure protection—in the form of prenuptial agreements. A divorce lawyer brought in as guest lecturer told students to be wary when a spouse wants to move to a jurisdiction where divorce settlements for the poorer party are generous, such as the United Kingdom or Hong Kong.

After lessons, the young aristocrats hit the local nightclubs. Many trailed in late in the mornings or didn't show up at all. One Thai teenager with orange-tinted hair turned up late for the first session and confessed to the group he had been out partying until 4 a.m.

"The most memorable part of the Next Gen was the parties," said Stevenson Lau, 29, who has attended the camp several times.

His father wants him to take over the firm he founded, Minwa Electronics Co., but Mr. Lau, a graduate of Syracuse University, is exploring other options, having launched a 2-D bar-code venture with two friends he met at the camp in 2005.

Priscilla Masagung, 22, said she would likely ask for a pre-nup during a chat after the session. The graduate of Babson College in Wellesley, Mass., said she is pondering what to do next with her life. She has an internship at auction house Sotheby's New York jewelry department this fall. The heiress's grandfather started the family empire from a kiosk selling books that now has evolved into a nationwide bookstore chain in Indonesia run by her brother.

"The obligation to be involved in the family business is a predicament that many of us face," she said. "It's a sensitive topic for us."

In an informal chat session, Citi Private Bank's Mr. Rahim encouraged the students to strike out on their own, as they could end up with a business bigger than the one their fathers built. "That stuff happens!" he said.

"I'm so glad you said that," said a young man who has left the family business for now to start up his own. While the salary is much lower, he said, "I'm having a lot more fun."

For some kids, one of the toughest parts of being rich is living up to the legacy of successful relatives. For Christopher Yum, one of Mr. Lau's partners, the bar was set by his grandfather, who started the family company 60 years ago as a small printing house in Hong Kong.

"He started empty handed, and I have my family supporting me," said Mr. Yum, 25, who joined the family business in 2007 and is now managing two sales and marketing teams comprising 20 people. "To be him is hard, but I'll always look up to him and hopefully I'll get to where he is."

The camp ended with the arrival of 42 parents for a graduation banquet in the hotel's largest chandelier-hung ballroom. Awards were distributed and group photos snapped.

Dato' Thong Kok Khee, chief executive of Malaysian holding company Insas Berhad, stepped away from cocktails with his peers to explain why he had sent his son to the camp this year and his daughter in 2003. His Citi private banker, who had sent him the invitations for his children, flanked him and his wife as they explained how their daughter had enjoyed mixing with children from a similar background and still keeps in contact with some of them.

"It is a unique opportunity for the children to get a snapshot of their parents' lives," he said.

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